Cooperative Society Types n Role

B.com 1 Introduction to Business

Prepared by: Izhar Mazhar Butt  Sarfraz Saleem

Describe briefy the various types o cooperative societies. Explain their role in the promotion o trade. (2006, 2008, 200, 20!" #ntroduction Co-operative is a special form of organization. It diers from other maor forms of organizations as it is set s et up not to earn pro!t but to provide services to its members. It is based on self-help and not a pro!t see"ing business. #e!nition $%he $%he soci societ ety y is that that for form of orga organi niza zati tion& on& 'her 'herei ein n pers person ons s volu volunt ntar aril ily y associate together as human beings& on a basis of e(uality& for the promotion of the economic interest of themselves.)  *.C. Calvert $Cooperation is the act of person voluntary united for utilizing reciprocally their o'n forces resources or both under their mutual management to their common pro!t or loss.)  *arris

$ypes o %ooperative societies s ocieties 1. Produc oducer er+s +s ,ociety . Cons Consum umer er+s +s ,ociety . /ural ural ,oci ,ociet ety y 0. ar" ar"et etin ing g ,ociety

2. Insu Insurranc ance ,ociety 3. 4armi arming ng ,ociety 5. *ous ousing ,ociety 6. Cred Credit it ,oci ,ociet ety y

7. %rans ranspo port rt ,ociety 18. ,torage ,ociety 11. 9abour ,ociety

1. &. 'roducers cooperative )ociety 10. %he producer+s cooperative societies 'or" for small producers.  %he members of the society produce goods on their o'n. %he ra' material& tools& money etc. is provided to them by the society. 9ater on& the output is collected by the society and sold in the mar"et at the 'holesale rate. %he pro!t is distributed among members in proportion to the goods supplied by each member. *. %onsumers cooperative )ociety 13. %he main purpose of this society is to provide goods to its members at lo' price. %hese societies 'or" to remove the middleman from the e(uation. oods are purchased at 'holesale rates and then sold to members at cheaper rates. +. ural cooperative )ocieties 16. %he main obect of this society is to protect the rights of the people of rural area. %he people living in rural areas can form a society to supply things as per principles of cooperation. -. ar/etin cooperative )ociety 8. %his type of society is formed to help producers in selling their product at pro!t 'ithout the help of 'holesaler and retailer. %he obects of this society may include to provide mar"et information& dispose of the goods at ma;imum price and pool the production of  small producers etc. 2. #nsurance cooperative society . %his society ma"es contract 'ith the insurance companies on collective terms and conditions to provide insurance facilities to its members. %he cost of premium paid by members is lo'. 2&. 1armin cooperative )ociety 0. ,mall farmers to get bene!t of large scale farming. %he o'nership of land remains 'ith the members. But for the purpose of  farming& the 'hole land is treated as one unit. %he main purpose is to improve irrigation and to dispose of agricultural goods. 2*. ousin cooperative )ociety 3. ,uch society is formed to provide !nance to its members for the purchase of land or house or construction of house. %he main purpose is to facilitate its members to get their o'n house. It has usually three forms. i. *ouse building society ii. 4inance society iii. 9and ,ociety 2+. %redit cooperative )ociety 6. %his society is formed to provide the facility of loans on favourable terms to the members in rural areas. %he main purpose is

to provide loan at lo' interest rates. %he sources of funds of the society are under: i. #eposits of members ii. embership fee iii. ovt. 9oans 2-. $ransport cooperative society 8. ,uch society is formed to provide the services of transport to its members at concessional rates. < pass is given to the regular passengers to travel on permitted routes. &. )torae cooperative society . %his type of society provides storage facilities to its members for perishable and no-perishable goods. rading and distribution services are also provided by this society. &&. 3abour %ooperative society 0. %he uns"illed labourers set up this society to sell their services  ointly for various proects at favourable rates. 2.

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ole o %ooperative )ocieties in promotion o trade

&+. 4ricultural production 6. %he cooperative societies tend to increase the agricultural production 'hich helps us to promote trade. &-. #ndustrial production 08. =ith the help of cooperative societies the production of industrial goods is increased 'hich is a good sign for the promotion of the trade. !. obili5ation o resources 0. It helps to collect funds from members and invests such fund for productive purposes 'hich causes the promotion in trade. !&. anaement $rainin 00. %he cooperative society helps to train the members 'hich in turn helps to increase the trade. !*. %heap loans to armers 03. Cooperative societies help farmers to get loans on reasonable returns 'hich in return helps to increase I production and then subse(uently increase in trade. !+. )table prices 06. Cooperative societies help a lot in maintaining the prices of the goods stable. ,table prices help to increase the trade volume. !-. 1orein Exchane 28. %he cooperative societies play their role in earning foreign e;change. %hese societies help the government in improving the balance of payment position and then subse(uently increase in trade.

*. %heaper 'rices 2. %he consumer societies play their role by providing cheaper goods to its consumers 'hich increases the demand for such goods and causes in the promotion of trade.